Once upon a time, becoming a millionaire was the ultimate marker of financial success and many of you will no doubt remember the long-held ambitions of Del Boy and Rodney in Only Fools and Horses. Today, in cities like London, it is perhaps closer to a baseline for comfort than a symbol of excess, with the real story sitting several orders of magnitude higher.
John D. Rockefeller is widely considered the world’s first billionaire, achieving that status in 1916 as Standard Oil dominated the American economy. At the time, it was an almost unthinkable concentration of wealth yet just over a century later the conversation has already moved on, with Elon Musk achieving trillionaire status, at least on paper. Even for somebody who has spent more than two decades working in finance, the numbers are difficult to visualise and in casual conversation the sheer scale involved is often lost. When talking to my children, I find that the use of time is helpful to fully illustrate the differences.
One million seconds passes in under 12 days. One billion seconds takes roughly 31 years. One trillion seconds? More than 31,000 years. As such, even most of the world’s richest individuals are far closer to the average millionaire than they are to becoming trillionaires.
This level of wealth really is beyond comprehension for most of us and broadly reflects an economic system that that has become extraordinarily efficient at creating wealth, and seemingly increasingly comfortable concentrating it. That said, market cycles, regulation, taxation and competition can rapidly reshape personal fortunes, which is something we should all remain aware of.
The value of securities and the income from them can fall as well as rise. Past performance should not be seen as an indicator of future returns. All views expressed are those of the author and should not be considered a recommendation or solicitation to buy or sell any products or securities.
